This review describes general principles that contribute to the understanding of the relationship between drug concentrations and pharmacological effects. In particular, attention is given to drugs that exert direct and reversible pharmacological responses. First of all, the relationship between measured (total) concentration and effective concentration should be considered. The effect kinetics can often be described by rather simple principles, giving important information for interpretation of drug-monitoring data. In other situations, the application of new approaches in pharmacokinetic--pharmacodynamic modeling turns out to provide valuable insight for the interpretation of more complicated concentration--effect relationships that would not otherwise have been recognized.